The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of a domestic maritime insurance mechanism named the Bharat Maritime Insurance Pool (BMI Pool). The initiative will be backed by a sovereign guarantee of Rs 12,980 crore to ensure uninterrupted and affordable insurance coverage for India’s maritime trade.
The move comes amid rising global geopolitical tensions and increasing risks in international shipping routes, which have led to higher insurance costs and uncertainty in coverage availability. India’s maritime sector has traditionally relied heavily on international insurers, particularly the International Group of Protection and Indemnity (IGP&I) Clubs, for covering third-party liabilities such as oil spills, cargo damage, collision liabilities, and crew-related risks.
The newly approved BMI Pool aims to reduce this dependence by creating a domestic risk-sharing mechanism. It will provide comprehensive coverage for Indian-flagged vessels, as well as ships carrying cargo to and from Indian ports. The insurance coverage will include hull and machinery, cargo, protection and indemnity (P&I), and war risks.
According to the government, the pool will have a combined underwriting capacity of around Rs 950 crore. Policies will be issued by member insurers, enabling them to jointly handle risks and claims. This approach is expected to enhance India’s capacity in marine underwriting, claims management, and legal expertise tailored to domestic shipping needs.
The government believes the BMI Pool will play a crucial role in safeguarding India’s trade interests, especially during times of sanctions or geopolitical disruptions when international insurers may withdraw coverage. By ensuring continuous insurance availability, the initiative is expected to stabilize freight operations and protect exporters and importers from sudden cost spikes.
A governing body will be established to oversee the functioning and operations of the pool. The sovereign guarantee provided by the government is aimed at strengthening confidence in the system, ensuring financial backing, and promoting self-reliance in the maritime insurance sector.
Overall, the initiative is seen as a strategic step towards enhancing India’s resilience in global trade, reducing external dependencies, and ensuring smooth functioning of maritime logistics under challenging global conditions.